Read Part 2 of 9 of our Complete Guide to Small Hotel Property Management Software to compare on-premise hotel PMS systems and cloud-based online hotel management systems and get our advice for which type of hotel PMS is right for your small hotel.
1. Types of Hotel PMS
Hotel PMS systems are software suites that are specially designed to help property managers and hotel owners manage some or all aspects of their hotel operations.
Every hotel from major international chains to the smallest B&B can benefit from a hotel PMS system, but not every system is ideal for every hotel. What works for Marriott probably won’t work as well for your beachside motel.
There are two main types of hotel PMS systems:
- Legacy or on-premise PMS
- Cloud-based PMS
Understanding the different types of hotel PMS can help you choose the right system for your property. (Spoiler alert—in the year 2023, it’s probably a cloud-based PMS. Keep reading to learn why).
Legacy or on-premise PMS systems are typically used by larger hotels or hotel chains that have the physical space and budget to purchase, maintain, and house the equipment required to run these systems. Cloud-based online hotel management systems, on the other hand, are typically ideal for smaller hotels that would benefit from having their PMS available on the go, and that may not have the budget or space to accommodate the tech infrastructure needed to run an on-premise system.
Let’s dig into both of these types of hotel PMS.
2. Legacy / On-Premise Hotel PMS Systems
Legacy applications like on-premise hotel PMS systems are critical to day-to-day operations, but they’re based on outdated technology—as a result, they generally aren’t as flexible or adaptable as modern systems like a cloud-based hotel PMS. But because they’re so key to managing daily operations, it can be challenging and anxiety-inducing for hotels of any size to consider switching to a nimbler cloud-based solution.
Whether you’re considering phasing out your on-premise system or you’re just starting to look into types of hotel PMS for your small hotel, here are the key things you need to know about on-premise hotel PMS systems:
- Accessibility: The software must be installed on every device you want to access it on. Larger hotels with dedicated teams that handle different daily tasks may find this a simpler way to manage operations, but for small hotels, it means your PMS may not be accessible on the go, and it can be more difficult for your entire team to access the information they need when they need it.
- Data storage: All your property management data will be stored in dedicated on-site servers. Purchasing this equipment requires a much bigger investment in your property’s tech infrastructure (not to mention requiring physical space for the servers), as well as more ongoing maintenance and greater responsibility for data security. For small hotels who don’t have dedicated IT staff, these increased technological needs can be a challenging and costly barrier.
- Cost: Software licenses for on-premise software can also be costly, especially if you need multiple licenses so you can access your hotel PMS system on multiple devices. The up-front hardware costs for your on-site servers and their maintenance can be significant as well.
- Integrations: On-premise hotel PMS systems can be integrated with other important systems like your channel manager or point of sale software, but these integrations may require additional hardware and will almost certainly require technological expertise to implement.
- Updates: Software updates are less frequent and may even require expensive hardware upgrades. Unless you continue to invest in these upgrades (assuming they’re available), your on-premise hotel PMS software may eventually just become obsolete, leaving you in the lurch without a hotel PMS system to keep you organized.
Think of an on-premise hotel PMS system like a corded landline phone. At one point they may have been groundbreaking and essential, but nowadays they’re an outdated relic and chances are you only see them when you visit your parents or grandparents. Goodbye landlines, hello smartphones—or in this case, hello cloud-based online hotel management systems.
3. Cloud-based Online Hotel Management Systems
Cloud-based online hotel management systems are just as critical to day-to-day operations as on-premise hotel PMS systems, but unlike legacy applications, they use more modern technologies and can be accessed on any connected device with a web browser.
Making the switch from a legacy system to a new cloud-based hotel PMS (or selecting an online hotel management system as your very first hotel PMS system) can feel intimidating to many hotel owners, especially small hotel owners who may be comfortable with the systems they currently have in place—even if they aren’t serving them well. We totally get it—when you’re busy managing your hotel, it can be hard to find the time to learn a new system and train your staff on it as well.
If you’re considering a cloud-based PMS for your small hotel, here are the key things you need to know about online hotel management systems:
- Accessibility: Online hotel management systems can be accessed from any connected device with a web browser. All you need is a computer, tablet, or smartphone with a strong internet connection. This means your entire staff can access your PMS software from any connected device, whether they’re busy checking in guests at your front desk or they’re on the other side of your property cleaning a room.
- Data storage: Data is stored off-site by your software vendor, and your vendor is responsible for data security and hardware maintenance. For independent and small hoteliers, this means you can implement a hotel PMS system without dropping a bunch of cash on major tech upgrades—and stop relying on your tech-savvy team members to act as your in-house “IT expert” so you can avoid hefty charges for technical service calls.
- Cost: Cloud-based online hotel management systems like innRoad are billed as a monthly subscription. Some providers offer different subscription tiers or add-ons to provide you more functionality, such as channel managers or contactless check-in, giving small properties the flexibility they need to create a customized hotel PMS system that suits their needs and budget without paying for unnecessary tools or features.
- Integrations: The best online hotel management systems typically have open APIs that are easy to integrate with other key systems, such as channel managers and POS systems. Not a tech expert? No problem. Your software provider will help you set up the integrations.
- Updates: Software updates are more frequent and are typically free, with instant deployment and now extra tech needs to get them up and running.
Compare cloud-based PMS vs. on-premise PMS systems in the chart below:
4. What Type of Hotel PMS System Is Right For Your Small Hotel?
In most cases, cloud-based online hotel management systems are ideal for small hotels. If you already have a legacy system in place, whether it’s pen and paper or a software suite complete with on-site servers you installed in the 2000s, it’s often worth switching to cloud-based hotel PMS systems simply for the ease of maintenance, the increased accessibility, and of course, the reduced costs.
It can be scary to make such a big switch. To help ease the transition, look for a PMS like innRoad that offers dedicated implementation advisors, 24/7 technical support, and unlimited training for all of your staff. Running a small hotel is an around-the-clock business, so a PMS that offers around-the-clock support is key, both while you’re learning the ropes and when your entire staff is familiar with your software.
5. Checking Out
When you switch to a cloud-based hotel PMS like innRoad, you get access to all the essential property management features you need from a single dashboard. Not only can you manage your reservations easily, but you can launch an easy-to-navigate booking engine for your guests, streamline operations like housekeeping and maintenance, and even use revenue management tools, channel management features, and securely process credit card payments from any device.